Building more parking at major employment centers: Can full-cost recovery parking charges fund TDM programs?

- Evaluates the full costs that surface parking pose to large urban institutions.
- Uses a sophisticated pro-forma approach to estimate and illustrate parking construction costs.
- Finds that costs can range from $45-75,000 per space and are subject escalation and price increases.
- Offers scenarios showing how TDM programs can provide an alternative to constructing new parking.
- Illustrates how TDM programs can defer expenses for large employers as opposed to constructing new parking.

In dense urban areas, surface parking often poses an opportunity cost, and reuse of the land for urban development with parking relocated to a multi-story structure may be an attractive option. This paper analyzes the cost of replacing surface parking with a parking structure and finds that it may be equally cost effective to pursue travel demand management strategies. The paper analyzes what it costs to build a parking space in a multi-story structure (garage) using US average data as well as data from the case of a typical large US employer, the University of California, Berkeley. The Berkeley case illustrates how replacement of surface parking with structures can substantially escalate costs and necessitate price increases for everyone, unless costs can be offset through more efficient utilization rates (e.g., renting out employee parking for evening and weekend use) or the parking system is credited for the land value of former surface parking (not likely in the situation considered here). A transportation demand management (TDM) program offering incentives for other modes of commuting can reduce the need for new parking, and its annual costs are likely to be lower than the amounts needed to cover new parking construction. Parkers could be better off paying for TDM programs to reduce parking demand rather than paying to build new parking structures. The findings are case specific but are likely to resonate with many employers and institutions that provide parking in high-cost urban areas.